JLT's monthly fund index update for the month of December 2016

03 January 2017

JLT Employee Benefits (JLT) has updated its monthly index, showing the funding position of all UK private sector defined benefit (DB) pension schemes under the standard accounting measure (IAS19) used in company reports and accounts.

As at 31 December 2016, JLT estimates the total DB pension scheme funding position as follows:

At 31 December 2016

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£596bn

£765bn

(£169bn)

78%

FTSE 350 Companies

£675bn

£866bn

(£191bn)

78%

All UK Private Sector Pension Schemes

£1,448bn

£1,882bn

(£434bn)

77%

For comparison, the corresponding figures as at 31 December 2015 are as follows:

At 31 December 2015

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£536bn

£606bn

(£70bn)

88%

FTSE 350 Companies

£605bn

£686bn

(£81bn)

88%

All UK Private Sector Pension Schemes

£1,225bn

£1,458bn

(£233bn)

84%

Charles Cowling, Director, JLT Employee Benefits, comments: 

“2016 has been a turbulent and tumultuous year not just for politics and markets, but also for pension schemes. This last month we have seen a slight deterioration in deficits but they are still below the record heights of over £500 billion recorded at the end of August, as markets rallied from Brexit and the US election shocks. However, pension scheme deficits are still significantly larger than the levels at the start of the year and there appears to be no relief in sight for companies with large pension schemes. Indeed, these figures represent a record year end deficit position for companies and their pension schemes.

“Now we have reached the all-important year-end for many companies, we are going to see many companies’ accounts showing a marked deterioration in their year-end pension numbers. There will be instances where the pension scheme will represent a serious threat to the company’s balance sheet and, in some cases, the company’s ability to pay dividends.

“Let us hope that 2017 brings some relief to hard-pressed pension schemes – and an easing of the burden of pension risks on employers, trustees and pension scheme members alike. We can hope that pension schemes will take further steps to manage both assets and liabilities and to reduce pension risks down to an affordable level. The tools now exist for an effective de-risking of pension assets and liabilities which, whilst not promising a silver bullet, do mean that pension problems can be managed and solved in time. Maybe 2017 will be the year when formal end-game de-risking strategies are at last embraced by the majority of pension schemes.”

- ENDS -

Notes to Editor

Enquiries:

JLT Employee Benefits

Corinne Gladstone, PR Manager| T: +44 (0)20 7895 7705| E: corinne_gladstone@jltgroup.com

Smithfield Consultants:

Julia Cooke | T: +44 (0)20 7903 0631| E: jcooke@smithfieldgroup.com 

About JLT Employee Benefits

JLT Employee Benefits is one of the UK's leading employee benefit providers offering a wide range of benefit and pension services, including administration, actuarial and pension consultancy, investment, Self Invested Personal Pensions (SIPPs) and Small Self Administered Schemes (SSASs) administration, flexible benefits, healthcare, benefit communication and financial education.

JLT Employee Benefits employs over 2,200 professionals throughout the UK and in 2013 had revenues of £172m in UK & Ireland.

Pensions and employee benefits companies within the JLT Employee Benefits group of companies include: JLT Benefit Solutions Ltd, Profund Solutions Limited, JLT Wealth Management Limited, JLT Investment Management Limited and Independent Trustee Services Limited. JLT Employee Benefits is part of Jardine Lloyd Thompson Group plc.

www.jltemployeebenefits.com

About Jardine Lloyd Thompson Group plc

Jardine Lloyd Thompson is one of the world's largest providers of insurance and employee benefits related advice, brokerage and associated services. JLT's client proposition is built upon its deep specialist knowledge, client advocacy, tailored advice and service excellence.

JLT is quoted on the London Stock Exchange and owns offices in 41 territories with some 10,600 employees. Supported by the JLT International Network, it offers risk management and employee benefit solutions in 135 countries.

www.jlt.com


contact Charles Cowling
Director charles_cowling@jltgroup.com 0161 242 5388